European Markets Rally After Fed Leaves Rates Unchanged

(RTTNews) - The European markets enjoyed a strong rally Thursday, as investors across the pond had their first opportunity to react to yesterday's Federal Reserve announcement. The Fed's decision to hold interest rates at current levels triggered a weakening of the U.S. dollar. The drop in the dollar sparked a rally among commodities, which meant big gains for mining, gold and energy stocks.

Banks and financial stocks also continued to benefit from Wednesday's actions taken by the Bank of Japan. The Bank of Japan modified its existing policy framework, giving thrust to the yield curve as it still struggles to achieve the 2 percent inflation target.

The governing council of the European Central Bank said it will remain alert and ready to act, if warranted, to achieve its price stability objective, the bank said in its economic bulletin on Thursday. The bank noted that risks to the outlook for global economic activity remain on the downside.

The United Kingdom faces a challenging period of uncertainty and adjustment although the financial stability has been maintained through a period of volatility, the Financial Policy Committee of the Bank of England said Thursday.

According to FPC, heightened uncertainty about the near-term macroeconomic outlook and the U.K.'s future relationship with the EU is reinforcing domestic risks.

The FCP judged that risks to UK financial stability from the global economy remain elevated.

The pan-European Stoxx Europe 600 index advanced 1.59 percent. The Euro Stoxx 50 index of eurozone blue chip stocks increased 2.33 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.53 percent.

The DAX of Germany climbed 2.28 percent and the CAC 40 of France rose 2.27 percent. The FTSE 100 of the U.K. gained 1.12 percent and the SMI of Switzerland finished higher by 0.99 percent.

In Frankfurt, Rocket Internet soared 7.41 percent. The e-commerce investor said it had made progress to cut losses at several of its key start-ups in the second quarter.

Utility RWE leaped 4.17 percent and peer E.ON gained 3.35 percent.

Deutsche Bank increased 3.24 percent and Commerzbank added 1.69 percent.

In Paris, power utility EDF finished up 0.37 percent after trimming its 2016 earnings outlook, citing lower nuclear output and changes to regulated tariffs.

Societe Generale increased 2.27 percent and BNP Paribas climbed 2.29 percent. Credit Agricole also finished higher by 1.27 percent.

Total jumped 3.68 percent and Technip advanced 0.63 percent.

In London, Rolls-Royce Holdings gained 1.10 percent. The engineering giant has appointed Stephen Daintith as its Chief Financial Officer and as an executive director of the company.

Oil rig maker Lamprell soared 8.93 percent despite reporting a loss in the first-half as a result of its settlement with Ensco.

Mitchells & Butlers rose climbed 2.60 percent. The pub chain posted improved trading results in the most recent eight weeks, supported by favorable weather.

Mining stocks turned in a strong performance. Glencore leaped 5.48 percent and Fresnillo advanced 5.20 percent. Randgold Resources increased 4.36 percent and BHP Billiton climbed 4.14 percent. Antofagasta rose 4.31 percent and Rio Tinto added 3.28 percent. Anglo American also gained 3.58 percent.

Shipping and oil firm A.P. Moller-Maersk gained 3.43 percent in Copenhagen after it has decided to split itself into two companies focused on transport and energy.

Molecular diagnostics developer MDxHealth soared 10.86 percent in Brussels after upgrading its revenue forecast.

Nokia advanced 3.39 percent in Helsinki. The telecommunications network company has launched its public buy-out offer for all the securities of Alcatel-Lucent that it does not own.

Banco BPI jumped 3.57 percent in Lisbon after Spain's Caixabank raised its BPI bid price to 1.134 euros per share.

Telecoms giant Ericsson rose 1.50 percent in Stockholm on reports that it plans to end all of its manufacturing in the country.

Eurozone consumer confidence edged up in September, reversing the decline in previous three months, preliminary figures from the European Commission showed Tuesday. The flash consumer confidence index edged up by 0.3 points to -8.2 from -8.5 in August. The reading was in line with economists' expectations.

Germany's real wages grew at a slower pace in the three months ended June, figures from Destatis showed Thursday. Real wages rose 2.3 percent year-over-year in the second quarter, following a 2.6 percent increase in the previous quarter. The measure has been rising since the first quarter of 2014.

French manufacturing confidence improved in September, survey results from the statistical office Insee showed Thursday. The manufacturing confidence index rose to 103 in September from 101 in August. The score was expected to remain unchanged at 101.

After reporting only slight shifts in first-time claims for U.S. unemployment benefits over the past few weeks, the Labor Department released a report on Thursday showing that initial jobless claims unexpectedly dropped to a two-month low in the week ended September 17th.

The report said initial jobless claims fell to 252,000, a decrease of 8,000 from the previous week's unrevised level of 260,000. The decline surprised economists, who had expected jobless claims to inch up to 262,000.

Despite mortgage rates near record lows, the National Association of Realtors released a report on Thursday showing an unexpected decrease in U.S. existing home sales in the month of August. The report said existing home sales slid 0.9 percent to an annual rate of 5.33 million in August after tumbling by 3.4 percent to a downwardly revised 5.38 million in July.

The continued decrease in existing home sales surprised economists, who had expected sales to climb to a rate of 5.44 million from the 5.39 million originally reported for the previous month.

A reading on leading U.S. economic indicators unexpectedly saw a modest decrease in the month of August, the Conference Board revealed in a report on Thursday. The Conference Board said its leading economic index edged down by 0.2 percent in August after climbing by an upwardly revised 0.5 percent in July.

Economists had expected the index to inch up by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.